Discrepancy Between Insurer And Hospital Leaves Consumer With A $24K Bill

By Consumers for Quality Care, on October 20, 2017

Photo by Heidi de Marco/KHN

Three year-old Elodie Fowler went to Lucile Packard Children’s Hospital for an MRI. She has a rare genetic condition and her doctors wanted to have a better understanding of what was causing swelling in the right-side body and digestion issues, Voxreports. The scan only took about 30 minutes. When it was over Elodie’s doctors placed her on an experimental drug regimen.

Elodie’s parents had researched the prices of pediatric MRIs and prepared themselves for something in the ballpark of a few thousand dollars. They had experience with expensive medical procedures – Elodie had already had CT scans, colonoscopies and ultrasounds.

However, the Fowlers were still shocked when the bill for $25,000 came, including $4,00 for anesthesia, $2,700 for a recovery room, and $16,600 for the scan and various doctor fees. Their insurance company had only covered $1,500 and change, leaving the Folwers with a bill close to $24,000.

“I honestly thought it was a mistake,” Elodie’s mother, Annie Nilsson, says of receiving the bill. “There is no possible way anyone could be charged that much for one scan that took 30 minutes.”

The Fowlers had opted to take their daughter to an out-of-network hospital that specialized in her condition. As part of their research, they knew that their insurance company would not cover all of the costs of the out-of-network provider. However, the insurer told them that they would be covered for half of the “fair price” of the MRI.

“We broadly researched what an MRI should cost, and we thought it would be a couple of thousand dollars. Nowhere in our long back-and-forth with the hospital was there any hint from the people scheduling it that we could possibly see a price like this.”

In a statement, the hospital defended its price.

Elodie’s parents were able to negotiate the bill down to $16,000, which is paid in installments. Still, the payments strain the family budget.

“Every month, I hope they’ll maybe take pity and not send the bill, but of course they do,” Nilsson says. “Sometimes I’m late paying. My biggest issue is, how could the insurance say a fair price is $1,000 and the hospital say $25,000? How could there possibly be such a gap between those?”

It’s a question that many consumers face, especially given the lack of transparency in medical pricing. Even the hospital where Elodie had the scan admits that these kinds of procedures can have incredible cost discrepancies:

“Even services that seem routine, like MRIs, can vary dramatically in cost when those services are being provided to sick children…. While we cannot speak to what technology other California children’s hospitals employ or their costs, we know that costs can also vary regionally based on local market demands for labor, supplies, real estate and other essential components of health care delivery. All of these factors impact our pricing, and underlie the amounts we charge for the care we provide.”